Monday, July 7, 2014
Christopher Keating was a tenure-track professor of physics at the University of South Dakota. He did not get along with the only other full-time physics professor at the university. Keating filed a grievance against her with their department head. She responded with an accusation of sexual harrassment against Keating. After two heated exchanges with Keating, the department head rejected Keating's claims. Some time later, having been reprimanded for not seeking approval from either his colleague or the department chair for something that required such approval, Keating explained in an e-mail that he would not seek approval from his colleague because "she is a lieing [sic], back-stabbing sneak."
After that academic year ended, Keating was informed that his employment contract would not be renewed, because his e-mail violated Appendix G to the university's employment policy, which reads:
Faculty members are responsible for discharging their instructional, scholarly and service duties civilly, constructively and in an informed manner. They must treat their colleagues, staff, students and visitors with respect, and they must comport themselves at all times, even when expressing disagreement or when engaging in pedagogical exercises, in ways that will preserve and strengthen the willingness to cooperate and to give or to accept instruction, guidance or assistance.
Keating challenged his termination, alleging that the "civility clause" was unconstitutionally vague in violation of the U.S. Constitution's Due Process Clause. The District Court granted Keating the declaratory relief he sought. In Keating v. University of South Dakota, the Eighth Circuit reversed.
In the public employment context, the Eighth Circuit noted, the standard for vagueness is not as stringent as in the criminal context. "Standards are not void for vagueness as long as ordinary persons using ordinary common sense would be notified that certain conduct will put them at risk of discharge.” The Eighth Circuit found that the civility clause was neither facially void for vagueness nor impermissibly vague as applied to Keating. The Court read the offending e-mail in the broader context of Keating's refusal to work with his colleagues or to even communicate with his immediate superiors. So seen, the Court had little difficulty finding that Keating had failed to comport himself in ways that "preserve and strengthen willingness to cooperate."
Professor Arthur Leonard, of New York Law School (pictured), posted a link to this case and queried whether the civility clause could pass contractual (as opposed to constitutional) tests for vagueness. One wonders what sort of evidence either party would have to put forward to persuade the court as to the meaning of "civil" in this context. Those of us in the academy can likely come up with plenty of examples of interactions with colleagues in which one or more university employees can be said to have acted in ways that were not civil. Still, it is rare to see someone put in writing his principled opposition to cooperation and communication with his one disciplinary colleague and his department chair. Could Keating show contractual vagueness by pointing to rampant and unpunished incivility on the part of other university employees, or does the university have discretion to terminate any given professor who, in its determination, crossed the line of incivility?
In short, if universities are free to point to a civility clause whenever they want to terminate a professor, tenure means nothing. Keating was not yet tenured, but as to the constitutional and contractual issues, I don't think tenure would change the outcome of the case. On the other hand, a civility clause might be a useful tool that university administrators can use in extreme cases when a faculty member -- even a tenured faculty member -- is so unprofessional as to degrade the working environment for his or her colleagues. In this case, the fact that Keating called his colleague a lying, back-stabbing sneak" may be less significant than his statement that he would not trust his department chair or communicate with the university's only other full-time physics professor.
Friday, July 4, 2014
Michelle Meyer (pictured) has a very detailed post on this subject over at The Faculty Lounge. Her approach is different from Nancy's, focusing narrowly (but thoroughly) on the question of whether an Institutional Review Board (IRB) could have approved the FB experiment. There Meyer arrives at a different conclusion than I think Nancy would arrive at. Meyer thinks an IRB could have and should have approved the FB experiment based on informed consent (although she recognizes that one could dispute whether such consent was actually present), and Nancy, I think correctly, questions whether there are very strong arguments that FB users knowingly agreed to this kind of experiment when they agreed to FB's terms.
Thursday, July 3, 2014
Such is the rhetorical power of a contract, even one that nobody reads.
They also say "your trust is important to us."
Did Facebook act in bad faith by manipulating users' data feeds? It's at least arguable that they did.
Now, about the research results - as far as what the results showed, I'm not sure that the study did prove that positive posts enhanced users moods (and vice versa). A user may have changed the nature of a post in order to conform to the prevailing mood, but that doesn't mean they actually felt happier. Positive posts from others might have forced users to "fake it" by writing more positive posts and vice versa. So I'm not convinced that the research refuted the claim that happy Facebook posts depressed some FB users...
Dates: Monday, 29 June 2015 – Wednesday, 1 July 2015
Location: Faculty of Law, University of Amsterdam (the Netherlands)
Submission deadline: 15 November 2014
The 15th conference of the International Association of Consumer law is organized on the theme of “Virtues and Consumer Law”. We kindly invite participants from all around the world to submit an abstract of a paper they would like to present during the conference addressing one of the virtues and consumer protection issues.
The conference will run from approximately 10:00 AM on Monday, June 29, 2015 to 4:30 PM on Wednesday, July 1, 2015. It will be held at the Faculty of Law of the University of Amsterdam.
The goal of this conference is to provide a forum where leading international scholars, practitioners, representatives of consumer organizations, public authorities and business can gather together to present and discuss issues relevant to consumer protection in many sectors (financial law, health law, information law, sales law, etc.) and from various perspectives. We welcome both theoretical and empirical submissions.
TOPICS: While papers on all topics related to consumer protection are welcome, we especially encourage submissions related to the following topic areas:
- Self-realization (in tourism, air travel or entertainment sector);
- Faith (in public and/or private enforcement of consumer law, in collective redress);
- Curiosity (in e-commerce, telecommunication sector or on innovation and consumer law);
- Compassion (towards vulnerable consumers, in medicine or in clinical trials);
- Frugality (in the banking sector or in financial contracts);
- Fairness (against unfair commercial practices and/or misleading advertising, against unfair contract terms, in protection of SMEs, through good faith and fair dealing);
- Trust (through data protection, on privacy and security issues, through product safety and/or product liability, from behavioural economics perspective);
- Forgiveness (through mediation or ADR);
- Self-development (through education, through services, through consumer sale contracts);
- Hope (against overindebtness, through clean-slate doctrine, by way of insurance).
ABSTRACT: All interested should submit an abstract (500 words maximum) of a paper they would like to present and a CV to this address: firstname.lastname@example.org by November 15, 2014. All submissions will be reviewed by the organizers of the conference. All participants will be notified of the organizers’ decisions by January, 15, 2015. The timely notification should allow participants to benefit from often announced in January various reductions on flights to Amsterdam (for example, with the Dutch airlines, KLM).
FURTHER DETAILS: The chosen papers will be presented during concurrent workshop sessions with the presentation time being (strictly) limited to max 15 minutes. There will be short discussion time guaranteed in each concurrent workshop session. Authors of best papers will be presented with a possibility of publishing them in a volume, however, all authors will be ultimately free to publish their work in other venues, if they choose so. Please note that ALL participants (including presenters of the chosen papers for each concurrent workshops sessions) are expected to timely register according to the Registration policy as set on our website, which involves timely and full payment of the registration fee. Participants are warmly invited to attend all days of the conference, including the social program (drinks after the closing of the conference on both Monday and Tuesday; two conference dinners, on Monday and Tuesday respectively; canal boat ride).
Wednesday, July 2, 2014
Today's New York Times features a story about a new ride-sharing service called BlaBlaCar. The idea is simple -- it's just an internet ride board. Riders share with drivers the cost of travel between two cities. Drivers are forbidden from profiting from the ride share; BlaBlaCar takes a 12% cut. Cost savings over common carriers are significant, ranging according to the NY Times from 33% to 67%
The gimmick is the BlaBla part. Riders can indicate how much they want to talk en route. If you mark Bla, you want to ride in silence (or perhaps you want everyone to know that they can talk all they want but you will be hooked in to your iPod). If you mark BlaBlaBla, other riders (and the driver) are on notice that you will not shut up for six straight hours.
I don't think this would work for me. It's a question of etiquette and signaling. This might be useful if one could be more specific: e.g., BlaBla#WorldCup or BlaBlaBla#Kardashians or BlaBlaBla#MyElderlyMother'sHealthProblemsandMyRecentBreak-up would be useful to know in advance. If I were being honest, I would proclaim BlaBlaBla#HansKelsen, but that would guarantee me a train ticket. I might strategize and put Bla, because it seems more likely than not that I would not find all that much in common with my fellow passengers. But what if they turn out to be interesting? Can I BlaBlaBla, if I promised only Bla? Then, the next time I use BlaBlaCar, I might regret my misanthropy and commit to BlaBlaBla. Would I be a jerk if, after half an hour of conversations about pop stars or the best gear for rock climbing, I pulled out my iPod?
Of course, the odds are that most users of BlaBlaCar are young and interesting (to me), but I am old and boring (to them). So I should put BlaBlaBla because I am interested in hearing what 20- or 30-somethings are doing these days as they commute between European cities, but I would advise them to Bla me, because they likely do not want to hear about Hans Kelsen. This is based on my recent visit with my niece and three nephews whose BlaBlaBla fascinated me (when I could follow it) but who found my Bla, well, blah, or even bleh, but certainly nothing above meh.
But the question of legal liabilities does nag. BlaBlaCar seems rather blithe about the issues. The driver's insurance covers the possibility of injuries to passengers, and women who are wary of sharing cars with strange men can opt to ride only with other women. As for the rest, riders can rely on reviews of drivers and steer away from those who seem sketchy. This is all certainly an improvement over the level of risks assumed by, say, hitchhikers.
BlaBlaCar's terms of service put passengers on notice that the site cannot guarantee that they will be insured:
However BlaBlaCar gives no warranty or assurance in this regard and it is the Driver’s responsibility to verify that their insurance provides adequate cover.
As for other concerns, BlaBlaCar attempts to cover them under its Good Conduct Charter.
Omri Ben-Shahar, Regulation through Boilerplate: An Apologia (Reviewing Margaret Jane Radin, Boilerplate: the Fine Print, Vanishing Rights, and the Rule of Law), 112 Mich. L. Rev. 883 (2014)
William P. Johnson, Analysis of Incoterms as usage under Article 9 of the CISG, 35 U. Pa. J. Int'l L. 379 (2013).
Matthew J. Mitten, The Penn State "Consent Decree": The NCAA's Coercive Means Don't Justify Its Laudable Ends, but Is There a Legal Remedy? 41 Pepp. L. Rev. 321 (2014)
Tuesday, July 1, 2014
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The Duquesne Law Review recently published a symposium issue on "Contract Law in 2025" -- I've pasted links to the contributions below:
Drafting Our Future: Contract Law In 2025
The Future of Fault in Contract Law
Robert A. Hillman
Two Alternate Visions of Contract Law in 2025
Nancy S. Kim
The Future of Many Contracts
Victor P. Goldberg
A Eulogy for the EULA
Miriam A. Cherry
The Death of Contracts
Franklin G. Snyder & Ann M. Mirabito
Monday, June 30, 2014
After BP's oil drilling rig, the Deepwater Horizon (below, right) located off the Gulf Coast of Louisiana, caught fire and sank in April 2010, BP sought to purchases millions of feet of oil containment boom (pictured). Plaintiff Packgen sought to capitalize on this demand by manufacturing boom, although it had never done so before. Assuming the facts as alleged by Packgen, already by May 2010, Pathgen had secured an oral agreement from BP to purchase boom at $21.75/sq. ft., subject to inspection of Packgen's facilities and testing of Packgen's products to confirm that they met standards established by the American Society of Testing and Matierals (ASTM). Such inspection occurred, and Packgen's products satisfied ASTM's standards.
Although the parties seemed committed to working together and Packgen geared up to produce 40,000 square feet of boom per day, the parties continued to exchange communications throughout May. BP began to express concern about the connectors on Packgen's boom and demanded various modifications to Packgen's boom design. A field test of Packgen's boom did not go well. BP's needs changed. It demanded further changes and Packgen scrambled to comply. By the time Packgen was producing boom that met BP's needs, BP had capped the Deepwatern Horizon and its need for boom quickly dimishinished. It never purchased any boom from Pathgen, and Pathgen was left with 60,000 feet of boom, which it eventually sold for $2/sq. ft.
Packgen sued, alleging misrepresentation, breach of contract, and equitable claims. The District Court dismissed all of Packgen's claims, and it appealed, drawing a panel that included retired Supreme Court Justice David Souter.
The First Circuit affirmed the District Court's dismissal of all claims in Packgen v. BP Exploration and Production, Inc. The Court found that there was no misrpresentation because the BP personnel who indicated an intention to purchase Packgen's boom sincerely intended to do so at the time they made those representations.
As this alleged contract was for the sale of goods with a value in excess of $500, it was within the Statute of Frauds (SoF) and thus had to be evidenced by a writing. Packgen did not claim that the sale was evidenced by a writing but claimed that the transaction fell within two UCC exceptions to the SoF: the specially manufactured goods exception and the judicial admission exception.
On the specially-manufactured-goods exception, the facts were interesting. In short, Packgen could not avail itself of the exception because it re-sold the goods. Packgen pointed out that it had repeatedly modified the product to meet BP's specifications and that BP was buying 90% of the boom produced in the U.S. markets at the time. The Court pointed out that those circumstances are not relevant. The only question is whether the goods could be re-sold to another purchaser, and they could. The fact that the market for boom collapsed once BP stopped buying and that Packgen consequently could get only 10% of its original selling price does not change the fact that the product could be sold to another purchaser.
On the judicial admission exception, Packgen cited to an e-mail from a BP employee who, in reference to Packgen, wrote: "I do not understand why we keep placing orders with suppliers like this[.]" Seen in its context, the Court found that the e-mail was insufficient to overcome other evidence indicating that, at the time that e-mail was sent, both parties believed themselves to be negotiating a contract rather than as having a contract.
Packgen's equitable claims failed as well. It could not show evidence that BP had benefitted from the information it had provided regarding boom speicifications nor that it had provided any services in connection with the parties' on-going negotiations for which it expected payment. Packgen's promissory estoppel claim, like its breach of contract claim, fell because of the SoF. While the SoF is not a complete bar of promissory estoppel claims relating to promises to sell goods in excess of $500, in order to overcome the SoF, plaintiff must allege conduct such that refusal to enforce the alleged promise would be tantamount to allowing the SoF itself to become an instrument of fraud. But as Packgen's misrepresentation claims failed, it could show no actual intent to deceive.
Friday, June 27, 2014
Several months back, I blogged about KlearGear's efforts to enforce a $3500 nondisparagement clause in their Terms of Sale against the Palmers, a Utah couple that had written a negative review about the company. It was a case so bizarre that I had a hard time believing that it was true and not some internet rumor. Even though the terms of sale most likely didn't apply to the Palmers --or to anyone given the improper presentation on the website-- KlearGear reported the couple's failure to pay the ridiculous $3500 fee to a collections agency which, in turn, hurt the couple's credit score. The couple, represented by Public Citizen, sued KlearGear and a court recently issued a default judgment against the company and awarded the couple $306,750 in compensatory and punitive damages. Consumerist has the full story here.
Congratulations to the Palmers and Scott Michelman from Public Citizen who has been representing the couple. And let this be a warning to other companies who might try to sneak a similar type of clause in their consumer contracts....
Thursday, June 26, 2014
Thanks to Miriam Cherry (left) for sharing this one:
I love this fact pattern: as reported in the National Law Journal, a student who received a D in contracts is suing the law school he attended, as well as his contracts professor, claiming that the professor deviated from the syllabus by counting quizzes towards the final grade. He claims $100,000 in harm because the D in contracts resulted in his suspension from the law school. He could not transfer to a different law school because he was ineligible for a certificate of good standing.
The case is a cautionary tale. It appears that the syllabus indicated that the quizzes would be optional. The professor then announced in class that the quizzes would actually count. The plaintiff claims to have been uanaware of the change or at least adversely affected by it. I say it is a cautionary tale because I sometimes make changes to my syllabus, usually in response to student feedback. I make sure to e-mail all students to make certain that everyone is aware of the changes and I obsessively remind students of the changes because I worry about precisely what happened here. It may well be that the defendant contracts prof did the same, although the National Law Journal article states that the change was evidenced by the handwritten notes of another student.
There is an interesting exchange on the merits of the case in the comments to the ABA Journal article on this subject. Apparently, there is some case law stating that a syllabus is a contract. For the most part, I think such a rule would benefit instructors. No student could complain about my attendance or no-technology policies because I could tell them (doing my best Comcast imitation) that by continuing to attend my course, they had agreed to my terms. But many of the commentators think that written contracts can never be orally modified. I don't think a syllabus is a contract because I don't think there are parties to a syllabus and I don't think there is intent to enter into legal relations. Things might be different if the syllabus identified itself as a contract and informed students of the manner of acceptance of its terms.
Friend of the blog, Peter Linzer (right), chimes in (comment #13) and succinctly dismisses this notion that a contract not within the Statute of Frauds cannot be orally modified. In any case, he thinks the claim is best understood as sounding in promissory estoppel, and plaintiff's claim fails because, in short, he cannot claim to have reasonably relied on a promise just because he missed class or did not pay attention when that promise was retracted.
1:00 PM - 2:30 PM ET
1.5 CLE credits requested
Section of Public Contract Law
This program will provide an introductory review on the federal procurement bid protest process, with a focus both on the procedural complexities of bid protest litigation, as well as a high-level review of the types of substantive legal issues that frequently arise in bid protests.
Too busy to attend?
Pre-purchase the recorded program now.
Wednesday, June 25, 2014
In 2006, Jacqueline Goldberg signed an agreement* to purchase two hotel condominium units in Trump Tower Chicago, a 92-story building in downtown Chicago that comprises residential condo units, hotel condo units and all of the amenities one expects to find in a hotel (pictured at left). Some of these amenities are called "common elements" in which each individual purchaser of the condo units has rights. But the agreement into which Ms. Goldberg entered included a "change clause" that permitted the Trump Organizations to modify those rights with either the notice to or approval by the purchasers. Ms. Goldberg attempted to negotiate for a return of her deposit if she disapproved of the changes, but the Trump Organizations refused. Three such changes took place before Ms. Goldberg signed the agreement.
But then came the fourth change, to which Ms. Goldberg strenuously objected. She refused to close on the deal and demanded a return of her $516,000 deposit. The Trump Organizations placed her deposit in escrow, and she sued, alleging breach of contract and other causes of action. Some of her claims were dismissed, some were tried before a jury, and some were tried before a judge. Both the jury and the judge found for the Defendants. Ms. Goldberg appealed to the Seventh Circuit, resulting in Judge Posner's opinion upholding the District Court in Goldberg v. 401 North Wabash Venture LLC.
Ms. Goldberg's common law allegations basically came down to a claim that the Trump Organizations had engaged in a bait and switch -- she had bought the condos as an investment and had been led to believe that they would have a certain value. After the changes, that value was diminished. Judge Posner rejected this characterization of the agreement, since Ms. Goldberg, "a wealthy and financially sophisticated Chicago businesswoman," was aware of the change clause and had even attempted to have it removed. On the facts, there was no deception. She took a risk when she entered into the agreement with the change clause included.
Of more interest to us, Judge Posner concluded that Ms. Goldberg's breach of contract claim collapsed once her "bait-and-switch" theory was eliminated. While there is a duty of good faith, Judge Posner reminded Ms. Goldberg that it applies only in the performance of a contract, not in its formation. There follows an interesting discussion of law and equity. Ms. Goldberg challenged the trial judge's decision to decide on her breach of contract claim rather than submit the question to the jury. Judge Posner noted that rescission is an equitable, not a legal, remedy, and under both Illinois and Federal law, there is no right to a jury trial on an equitable claim.
One could imagine that Ms. Goldberg might have argued that the Trump Organizations breached the duty of good faith and fair dealing in the performance of the contract. After all, the bait might have occurred in the formation of the contract, but the switch occurred during performance. Ms. Goldberg would then have to show that while some changes were to be expected under the change clause, the actual changes that the Trump Organizations engaged in were not in the contemplation of the parties at the time they entered into the contract and undermined the original agreement (or something like that). It's not clear that Ms. Goldberg could have made such a showing. It seems that the Trump Organizations had good reasons for the changes that were made. In any case, if she were making that sort of argument, I think Ms. Goldberg would not have sought rescission of the agreement but enforcement of the original agreement without the changes.
Finally, one might see this as another example of corporations getting to impose unreasonable terms on a consumer. Here, Judge Posner has very little sympathy for the plaintiff, despite her advanced age, because of her sophistication. But the facts make clear that even she, who bought two condos as an investment, had no bargaining power as to the terms at issue. Posner undoubtedly applied the law correctly, but just think, if a person with Ms. Goldberg's means has no bargaining power as to one-sided and potentially unreasonable terms, what chance do the rest of us have?
For a different take on the same case, check out my law school's student law blog, the VALPOLAWBLOG, where you can find this post by student Faith Alvarez.
*Following Judge Posner's example, we simplify things by making it one agreement and ignore the complexities of the various Trump entities by referring to those entities collectively as the Trump Organizations.
Call for Papers
A Conference on
The ALI’s Principles of the Law of Liability Insurance
Rutgers Center for Risk and Responsibility
Rutgers School of Law-Camden
February 27, 2015
The Rutgers Center for Risk and Responsibility is planning a conference on The American Law Institute’s Principles of the Law of Liability Insurance. The conference will be held Friday, February 27, 2015, at Rutgers Law School‒Camden.
The Principles project aims, as Director Lance Liebman wrote, to draft “coherent doctrinal statements based largely on current state law, but also grounded in economic efficiency and in fairness to both insureds and insurers.” The ALI has approved Chapter 1, Basic Liability Insurance Contract Principles, and Chapter 2, Management of Potentially Insured Liability Claims. The project has sparked spirited debate, and this is an appropriate time to assess the work yet still early enough to influence the project. The conference will focus on issues raised in Chapters 1 and 2.
The Principles potentially have significance far beyond the law of liability insurance. Their distinctive approach to interpretation charts a middle ground between formalist and contextualist approaches which may provide a model for the interpretation of other insurance contracts and of other types of contracts, from standard form contracts to commercial contracts. The rules on the duty to defend and the duty to make reasonable settlement decisions will impact tort law and litigation and raise ethical issues. Therefore, the Principles should be of interest of scholars in contracts, torts, litigation, and professional responsibility as well as insurance and insurance law scholars.
The conference will engage academics and practicing lawyers in discussion of the Principles.
The structure of the day is evolving, but likely topics include panels on the Principles’ interpretation rules, the duty to defend, and the duty to settle. Confirmed speakers include George Cohen (Virginia); Mark Geistfeld (NYU); Bruce Hay (Harvard); Leo Martinez (UC Hastings); and Jennifer Wriggins (Maine). Reporters Tom Baker (Penn) and Kyle Logue (Michigan) will attend and respond. The Rutgers Law Journal may publish the papers from the conference.
Participation is invited from a broad range of scholars with interests relevant to in these topics. Submit abstracts by August 15, 2014, to Jay Feinman at email@example.com. Papers will be due January 5, 2015.
Jason W. Burge & Lara K. Richards, A Compelling Case for Streamlining Venue of Actions to Enjoin Arbitration. 88 Tul. L. Rev. 773(2014)
Elizabeth B. Crawford & Janeen M. Carruthers, Connection and Coherence Between and Among European Instruments in the Private International Law of Obligations, 63 Int'l & Comp. L.Q. 1 (2014)
Richard Holden & Anup Malani, Renegotiation Design by Contract. 81 U. Chi. L. Rev. 151 (2014)
Sandra K. Miller, The Best of Both Worlds: Default Fiduciary Duties and Contractual Freedom in Alternative Business Entities. 39 J. Corp. L. 295 (2014)
Daniel P. O'Gorman, The Restatement (Second) of Contracts' Reasonably Certain Terms Requirement: A Model of Neoclassical Contract Law and a Model of Confusion and Inconsistency, 36 U. Haw. L. Rev. 169 (2014).
Tuesday, June 24, 2014
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Thursday, June 19, 2014
This week, I received notice that I am a member of the plaintiff class in Schlesinger, et. al. v. Ticketmaster. After ten years of litigation, the parties' proposed settlement is pending before the Superior Court in Los Angeles. If you purchased tickets through Ticketmaster between 1999 and 2013, you most likely are also a part of the class. The case alleges (in short) that Ticketmaster overcharged customers for fees. Ticketmaster claims that its processing fees were necessary for it to recover its costs, while plaintiffs allege that those fees were actually a means of generating profits for Ticketmaster. Shocking, no?
The terms of the settlement are actually pretty sweet. Class members will get a discount code that they can use on the Ticketmaster website entitling them to $2.25 off future Ticketmaster transactions. Class members get to use the code up to 17 times in the next four years. The value of the discount codes is about $386 million, and if the money is not used up, class members will be eligible for free ticket to Live Nation events. Ticketmaster's website will also now include disclosures about how it profits from its fees.
But then there's THIS:
Ticketmaster will pay $3 million to the University of California, Irvine School of Law to be used for the benefit of consumers like yourself. In addition to the benefits set forth above, Ticketmaster will also make a $3 million cy pres cash payment to the University of California, Irvine School of Law’s Consumer Law Clinic. The money will establish the Consumer Law Clinic as a permanent clinic, and it will be used to: (i) provide direct legal representations for clients with consumer law claims, (ii) advocate for consumers through policy work, and (iii) provide free educational tools (including online tutorials) to help consumers understand their rights, responsibilities, and remedies for online purchases.
The settlement strikes me as masterly. It gets a beneift to people who, if the allegations are true, were actually harmed by the alleged conduct, but it does so in a way that will generate more business for Ticketmaster going forward, and Ticketmaster may value that new business stream at around $386 million in any case. Ticketmaster has had to make changes to its website to eliminate the risk of deception going forward. And the world gets a consumer protection clinic funded the sort of business against whom consumers need to be protected.
Congratulations to the attorneys who came up with this settlement and to the UC Irvine Conumser Protection Clinic on its new endowment.
Wednesday, June 18, 2014
Please do look too closely at my part in this. It is my first lecture in a MOOC. What I think is neat is the contract law rap by rapper. Brandon Rosin. Take a look but please stop when you get to my droning. https://class.coursera.org/globalintrouslaw-001/lecture/67
Sorry, after posting this I realized you have to sign in to view the tapes. If you go to the trouble -- very little trouble actually -- the rap is in the second contracts tape entitled, why have contract law. The artist is Brandon Rosin. https://www.youtube.com/user/ITSBlastfoME. The contracts rap is not on the youtube site but it will give you some idea of his "style." When you see the youtube bit you can understand why all of contract law might be taught in 2 minutes.
Tuesday, June 17, 2014
Over the past few years, more than a dozen 7-Eleven franchisees have sued the company claiming that it operated in bad faith by untruthfully accusing the franchisees of fraud and by strong-arming them to “voluntarily” surrender their franchise contracts based on such false accusations. The franchisees claim that the tactic, which is known in the franchise community as “churning,” is aimed at retaking stores in up-and-coming areas where the franchise can now be sold at a higher contractual value or from franchisees who are too outspoken against the company.
Franchisees split their gross profits evenly with 7-Eleven. The chain claims that it has hours of in-store covert footage showing franchisees voiding legitimate sales and not registering others to keep gross sales lower than the true numbers in order to pay smaller profits to 7-Eleven. Similarly, the chain uses undercover shoppers to spot-check the recording of transactions. This level of surveillance is uncommon among similar companies, says franchise attorney Barry Kurtz. A former corporate investigations supervisor for 7-Eleven calls the practice “predatory.”
Japanese-owned 7-Eleven asserts that a few of their franchisees are stealing and falsifying the sales records, thus depriving the company of its full share of the store profits. It maintains in court records that its investigations are thorough and lawful. It also complains that groups of franchisees often group together to create a “domino of lawsuits, pressuring the company to settle.”
It seems that a company installing hidden cameras to monitor not customers for safety reasons, but one’s own franchisees raises questions of whether or not these people had a reasonable expectation of privacy in their work-related efforts under these circumstances. If not, the issue certainly raises an ethical issue: once one has paid not insignificant franchise fees and continue to share profits with the franchisor at no less than 50-50%, should one really also expect to be monitored in hidden ways by one’s business partner, as the case is here? That has an inappropriate Big-Brother-is-Watching-You feel to it.
In the 1982 hit Dire Straits song Industrial Disease, Mark Knopfler sings that “Two men say they're, Jesus one of them must be wrong.” When it comes to this case, the accusations of “bogus” reasons asserted by the franchisees and returned fire in the form of theft accusations by 7-Eleven, somebody must not follow the contractual duty of good faith and fair dealings.
This case seems thus to be one that could appropriately be settled… oh, wait, the company apparently perceives that to be inappropriate pressure. Perhaps a fact finder will, then, have to resolve this case of mutual mud-slinging. In the meantime, 7-Eleven prides its “good, hardworking, independent franchisees” of being the “backbone of the 7-Eleven brand.” That is, until the company itself deems that not to be the case anymore, at which point in time it imposes a $100,000 “penalty” on those of its franchisees who do not volunteer to sign away their stores. The company does not reveal how it imagines that its hardworking, but probably not highly profitable, franchisees will be able to hand over $100,000 to a company to avoid further trouble.
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